Altria Group’s Spin-Off of Philip Morris International Inc.

  • B. Rajesh Kumar
Part of the Management for Professionals book series (MANAGPROF)


During 2007, Altria Group had spun off Philips Morris International tobacco arm which sold Marlboro cigarettes outside the United States. On account of litigation, regulation, and declining sales, Altria wanted to unlock the value of Philip Morris International Inc. (PMI) by spinning off the overseas operations into an independent entity. The spin-off of PMI is the second in a corporate restructuring that saw Altria spin-off its Kraft Foods. During 2007, Altria Group had spun off its majority stake in Kraft Foods. Kraft was the world’s second largest food company behind Nestle. In 2003, Philip Morris changed its name to the Altria Group. Altria shareholders received one share of PMI for every share of Altria common stock. The spun-off cleared the international tobacco business from the legal and regulatory constraints which were faced by its domestic partner, Philip Morris USA. The spin-off plan left Altria with its much smaller domestic tobacco business which still ranked as the biggest in the United States. After the spun-off, Altria owned Philip Morris USA, Philip Morris Capital Corp. which was the finance arm of Philip Morris and 29% stake in the London-based brewer SAB Miller. The stock price declined by 1% on the day after announcement. The cumulative returns for Altria during the 252-day period (−10 to +242) days were approximately 11%.


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  8. Philips Morris International Annual Report (2017) Accessed 9 Jan 2018

Copyright information

© Springer Nature Switzerland AG 2019

Authors and Affiliations

  • B. Rajesh Kumar
    • 1
  1. 1.Institute of Management TechnologyDubaiUnited Arab Emirates

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